Thursday, 15 December 2011


President Goodluck Jonathan met with a broad section of student leaders under the auspices of the National Association of Nigerian Students (NANS) on Tuesday and sought their support for the ongoing programme by his administration to deregulate the downstream sector of the oil industry.

The President who was accompanied by the Vice-President, Architect Mohammed Namadi Sambo, Ministers, the Secretary to the Government of the Federation, Senator Anyim Pius Anyim and the Chief of Staff to the President, Chief Mike Oghiadomhe explained that the future of Nigeria will depend on the difficult decisions we make today in growing the economy to create jobs and prosperity for young Nigerians.

The President stated that presently the country runs an annual budget of 26% capital expenditure and 74% recurrent.

He said apart from the fact that this lopsided expenditure pattern cannot meet the economic aspiration of Nigerians, even the 26% capital budget is borrowed annually because of the huge budget deficit government is compelled to implement.

The President told the student leaders that the situation in which Nigeria has to borrow to carry out capital projects as well as part of its recurrent expenses was an obvious road to disaster.

He said in the midst of all these difficulties staring the country in the face, the country has continued to bear a huge subsidy burden of N1.3 Trillion on fuel consumption.

He noted that the situation was so precarious that in the first 8 months of this year alone, government was forced to dole out N1.3 Trillion in payment to offset cost of subsidy to fuel importers.

He said currently, Nigeria which is in desperate need to rehabilitate its infrastructure in all sectors is compelled to spend almost One-Third of its annual budget on fuel subsidy.

President Jonathan explained that if this continues, in 2 to 3 years, the economy will crash.

He said in the past, every government avoided taking the difficult decision on this matter and instead resorted to borrowing to carry out government transactions thereby piling up huge domestic debts that today threaten the future of young Nigerians and future generations.

The President said having carefully considered this dangerous trend in the economy, he was left with no option than to tell Nigerians the truth of where we are in and to take the difficult but unavoidable decisions that will halt the obvious drift into crisis.

He said as President, he also has the option of playing nice by running to the banks to float bonds and borrow more money, thereby increasing the nation’s already unacceptable domestic debt level.

He said this option will be extremely selfish on his part and insensitive to the well-being and aspirations of present and future generations of Nigerians.

He said his administration has therefore opted for a full-scale deregulation of the downstream sector of the economy which will help lift government stranglehold and open the sector to investors who have been waiting at the gate for years for government to open up the sector.

He disclosed that presently 20 licences have been issued out to investors to build private refineries in order to refine enough products for domestic consumption and export, but that none has been able to take off because of government price control mechanism on fuel.

He said like we witnessed in the case of the telecoms revolution in the last 10 years, young Nigerians have no reason to be afraid of a deregulated downstream sector of the oil industry which will create jobs for hundreds of thousands of our school leavers.

The President pledged to adopt new measures and solutions in managing the economy in order to attract huge inflow of private resources to promote economic growth and wealth creation.

The President told the student leaders led by the current national leadership of NANS that as President, he would do everything in his powers to hand over a country future generations will be proud of.

Earlier, the Minister of Finance and Chairperson of the Economic Management Implementation Team, Dr. Ngozi Okonjo-Iweala had briefed the student leaders in statistical terms about the danger signals in the economy which needed urgent measures to address.

She said the deregulation of the downstream sector of the oil industry was only one of these measures, as government was also taking other measures to address issues of leakages in the economy and aggressive strategy to earn more from the maritime and other sectors of the economy.

She said presently, Nigeria offers the cheapest fuel in West Africa and one of the cheapest in the world including among many oil producing nations.

She showed the students statistics of fuel prices in several countries of the world, which showed clearly that even after deregulation, fuel prices in Nigeria will be among the cheapest in the world.

The Minister explained that the reason why in some countries prices were high after deregulation of their downstream sector was because most countries levy tax on fuel and that in order to keep prices at reasonable levels after deregulation, government has decided not to levy tax on fuel.

She further stated that the President had given the go ahead to deal with all issues of leakages in the economy against which measures are currently being taken.

The Vice-President, Architect Mohammed Namadi Sambo in his presentation, disclosed measures mapped out by government to reinvest proceeds that will accrue from deregulation in critical infrastructure, and in welfare programmes for Nigerians.

In their response, the student leaders welcomed the dialogue and urged Mr. President to do something about the ASUU strike and to increase investment in education.

The students said they were worried about increasing reports of corruption and urged the President to take strong measures against anyone involved in the abuse of public trust.

They also said although students have their differences with government, they will not allow anyone to influence their decisions and actions as far as the critical issues facing the future of the nation were concerned.

The President pledged to continue the dialogue with ASUU to resolve the ongoing dispute between the government and university teachers.

He said government has made education one of its key priorities and was investing heavily to renew infrastructure in higher institutions as well as opening up new opportunities for youths through the establishment of nine new universities.

The overall objective of his administration, he said, was to restore high quality and discipline to the Nigerian education system. The President appreciated the level of articulation and maturity exhibited by student leaders during the dialogue.

The student leaders said part of the reasons why Nigerians were critical of the deregulation of the downstream sector of the oil industry was the issue of lack of trust because of failure of governments to deliver on promises in the past.

They said as young Nigerians, they were interested in the way the economy was run and praised the President’s promise not to pile up debts for future generations.

They called on the President to allocate more resources to the welfare of students through the provision of potable water and facilities in higher institutions.

They pledged to continue consultations with their colleagues on the issues raised by the President

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